Sri Lanka's Path to Economic Recovery: IMF Reviews and Reforms

Sri Lanka and the International Monetary Fund (IMF) have agreed on economic policies concluding the fifth and sixth reviews of the country's reform program, enabling a release of $700 million from a $2.9 billion bailout. Significant economic growth and fiscal reforms have been achieved, despite external shocks and regional conflicts.

Sri Lanka has reached a significant agreement with the International Monetary Fund on economic policies, successfully concluding the combined fifth and sixth reviews of its reform program, the IMF announced on Thursday. The agreement paves the way for the release of $700 million from a $2.9 billion bailout package earmarked for 2023.

The reviews, conducted from March 26 until April 9, highlight Sri Lanka's commendable progress, with real GDP growth of 5% year-on-year in 2025 and a rebound in inflation to 2.2% as of March. The nation's foreign reserves have expanded to $7 billion as of the end of March 2026, significantly boosting the country's economic recovery efforts.

However, the IMF has urged Sri Lanka to continue accelerating reform momentum due to risks such as regional conflicts and natural disasters, calling for improved tax measures and prudent fiscal policy to secure macroeconomic stability and bolster socio-economic resilience.